The trial judge presiding over the stock ownership battle between American International Group and Starr International Company said he doubts AIG can prove its case.
During a break with the jury out of the room, U.S. District Court Judge Jed D. Rakoff told AIG attorneys June 22 they would have to present better evidence to substantiate their case against SICO.
AIG, New York, is suing its former privately owned partner SICO over control of AIG stock worth $4.3 billion in 2005.
The insurance conglomerate is also suing SICO for breach of faith for its handling of a deferred compensation program for a select group of executives under the SICO and AIG umbrella. The payments were made with a portion of the profits SICO made from its holdings of AIG stock.
Former AIG chairman and chief executive officer Maurice R. Greenberg was forced out of AIG in 2005 but continued as chairman of SICO and presided over its split from AIG shortly after he left the company.
Rakoff questioned the direction of AIG attorney Theodore Wells’ line of questioning, saying that in going over past testimony in an effort to impeach Greenberg’s testimony, he had not shown how speeches the former executive gave about the deferred compensation plan legally bind SICO to continuing the program.
“Whether [the program] was discontinued unilaterally or by mutual agreement…I doubt it would be a legally enforceable act,” Rakoff said about SICO’s ending of the program. He also told Wells that he questioned whether Greenberg’s statement about the program lasting 200 years made it legally binding.
“I’m extremely doubtful about it,” he said, adding, “I don’t think it legally holds him to it.”
Rakoff also seemed to be showing impatience with the pace of the trial, telling attorneys for both sides that from his review of the witness list, “So far, I am mystified why any of these experts have any relevance to this case at all.” He repeated “at all!” loudly.
SICO’s attorney, David Boies, wrapped up his cross-examination of Greenberg by having his client repeat his view that SICO created the more than 30-year-old compensation program to benefit a select group of employees and AIG itself. Greenberg testified that SICO paid the awards every two years at the discretion of its voting shareholders.